Browsing: Tax

Q. I have read conflicting views on whether the Voluntary Separation Incentives Payments (VSIPs) and annual leave payments are subject to the earnings test. Other sites report under Office of Personnel Management rules monies you earn in the year in which you retire are not subject. Does this mean if I retire in March and lump sum payment for annual leave and a VSIP is paid that year, it does not count against my supplement?

Q. I am a FERS retiree. My total retirement contribution that’s been taxed is $16,000. I understand this is averaged through my mortality and have a portion every month, tax free. Is there an option where I can take the total $16,000 and apply all in a given tax year as tax free even though that will eliminate the monthly, tax-free amount?

Q. My wife in the 1980s, for about two years, worked full time as a registered nurse at the VA in West Haven, Connecticut. My understanding is that she may be entitled to some sort of retirement-related benefit (albeit small) as a result of working there. She shared with me that some tax was deferred to another federal mechanism — for lack of a better term. Any thoughts on where to start looking?

Q. I live in a state that does not tax Social Security (including supplements) and allows a $6,000 deduction of pension income (FERS). Is the FERS supplement portion of my pension exempt from state income tax as well?

Q. I recently attended a FERS retirement seminar and was told that buying back my enlisted military retirement is a bad idea because it would be close to $40,000 to $50,000. I have calculated my buy back on several online federal calculators and don’t come up with anything near that cost. I am calculating all of my active duty earnings from my entry date on active duty through my retirement date — 20 years and one month. I have included the 10 years of interest I have accrued as well since I did not buy it back within my first four years of…

Q. Let’s say I make a partial withdrawal for $50,000 in late November to make a down payment on a new house, and then retire in December. And automatically withheld is $10,000. I also still fall into the 28 percent tax bracket. Will that remaining $40,000 be taxed at 28 percent or 8 percent?